In the tight-knit diaspora of Persians who migrated to Southern California in the wake of the Iranian Revolution, Vahid David Delrahim is a figure of note.

The owner of some 100 Southern California car washes and gas stations, he has been feted in Beverly Hills as a major donor to the Jewish National Fund which raises millions of dollars a year for Israeli settlements.

But an unusual wage theft case unfolding in a Santa Ana federal court offers a dark picture of the car wash mogul’s businesses and raises ethical issues concerning his lawyers at Littler Mendelson, the nation’s largest management-side employment firm.

The U.S. Department of Labor has charged Delrahim and his managers with cheating some 700 workers at a dozen of his facilities in Orange, Los Angeles, San Bernardino and Ventura counties over a five-year period, failing to pay minimum wage and overtime.

According to prosecutors, the workers, nearly all Latino, were ordered to arrive early, but were not allowed to clock in until customers arrived. When business slowed, they had to clock out but still remain on duty, waiting until more customers turned up. The result: numerous hours without pay.

The government is seeking at least $4 million in back wages and damages.

In court documents, Littler Mendelson lawyers said the workers “were engaged in activities that were preliminary or postliminary to their principal activities and thus are not compensable.”

Delrahim did not respond to telephone messages left at his office. Aragon wrote in an email, “We do not comment on client litigation matters.” A labor department spokesman also declined comment.

The case, which so far has lasted 20 months, is extraordinary in that very few federal or state wage and hour disputes end up in court, and a minuscule number last this long. In almost all cases, business owners, when confronted with wage theft evidence, quietly pay up and move on.

But the Delrahim investigation, which began in June 2015 with 63 current and former workers of a single facility, the Brea Car Wash & Detail Center, has turned into a fierce legal slugfest. Three of his Agoura Hills-based companies are also defendants: Southwest Fuel Management, Goldenwest Solutions Group and California Payroll Group.

After more than 200,000 pages of filings, documents, depositions and testimony over nearly two years, and with the case headed to trial, Delrahim’s legal costs could conceivably approach the amount of back wages the government is claiming. Fees at Littler Mendelson range up to $615 an hour.

Even more unusual than the initial wage theft charges, the case has exploded into a battle over legal ethics, offering a window into the hardball tactics of employment litigation.

Delrahim and Littler Mendelson responded that texts, email accounts and videos were routinely–but not deliberately–deleted and would not have proven the alleged wage theft. The lawyers asserted it was too burdensome to retain video footage.

UC Irvine law professor Sameer Ashar who teaches ethics and co-directs the school’s immigrants’ rights clinic, notes, “it may not be exceptional that employers are tempted to tamper with records and with lawyers potentially closing an eye to it.”

Lawyers, he added, “are caught between conflicting duties. On the one hand they must advocate zealously for their clients, but ethical and civil procedure rules require them to turn over records forthrightly and honestly.”

Prosecutors struck another blow in the case by adding Delrahim’s daughter, Shannon Delrahim, as a defendant.

Littler Mendelson had argued that Shannon was a 21-year-old “part-time marketing intern,” enrolled full time at Pepperdine University. But documents subpoenaed from Pepperdine showed that Shannon was actually 26, had listed her job as HR director for her father’s companies since 2009, and attended classes only at night and on weekends.

Then, in November of last year, the case took an even more dramatic turn.

Aragon and her team submitted signed declarations from 37 car wash workers, gathered months before, saying that they had never worked off the clock.

During furious back-and-forth motions over sanctions (for destroying evidence, it turned out), Littler Mendelson, without alerting the court as is customary, had undertaken a stealth campaign to undermine the testimony of government witnesses.

In an email, Littler Mendelson spokeswoman Jennifer Klein added, “We dispute the DOL’s claims in relation to Littler’s handling of this matter. These court filings speak for themselves.”

Over the course of the case, Delrahim and Littler Mendelson have been sanctioned by the court five times for withholding documents and other “not substantially justified” delaying tactics. They have been ordered to reimburse the government $23,850 in legal fees.

Last month, presiding Judge Fernando Olguin tossed out the declarations from 37 car wash workers citing the “coercive” and “improper” manner they were collected. Many of the Spanish speaking workers are illiterate in English.

Delrahim and his companies’ “misleading conduct has created fear and confusion among its employees,” the judge wrote in an 11-page order, making it less likely they will cooperate with federal authorities.

One female employee, he noted “began to cry” during the interview with Delrahim’s lawyers. Another worker signed “because he felt he would lose his job or have his hours cut if he did not.”

None were given copies of the document they signed, nor were they told they could forfeit back wages by signing, he added.

Olguin ordered Delrahim and Littler Mendelson to send all 700 workers a notice in English and Spanish informing them that the government has determined they are owed back wages, that they can refuse to talk to Delrahim’s lawyers without experiencing retaliation, and that talking to them could limit their ability to collect back wages.

Rather than hold further lengthy hearings on issues of coercion, intimidation and retaliation, Olguin wrote, “the better course is to proceed to a trial on the merits.” A trial date of July 17 has been set.

Ashar, the UC Irvine professor, said Littler Mendelson’s helping to get workers to sign declarations “behind the back” of labor department lawyers “may not be a technical violation of the rules.” However, he added, “it is legally and ethically problematic. They got these workers to undercut their own interests.

“The fact this has been brought to the surface in federal court is a rare thing.”

Margot Roosevelt covers economic news. She has been a staff reporter at The Orange County Register since 2012. Before that, she was on staff at the Los Angeles Times, covering environmental news. Earlier jobs: Congressional reporter for the Washington Post; foreign and national correspondent for Time Magazine.

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